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How Is Human Resource Different from Land and Physical Capital?

Human resource is different from other resources like land and physical capital because it can make use of land and capital, while land and capital cannot become useful on their own. People bring skill, knowledge and effort: they farm the land, run the machines and improve both. Human resource can also grow in quality through education, training and health, which land cannot.

This is a common question from NCERT Class 9 Economics, Chapter 2, "People as Resource". Below are the exam answer, a comparison table, examples and related questions.

Human resource vs land and physical capital, NCERT Class 9 People as Resource: human resource is living and can use land and capital, land is passive and fixed, physical capital is man-made and needs people to run
Short answer (as in NCERT)
Human resource is different from other resources like land and physical capital because it can make use of land and capital. Land and capital cannot become useful on their own. Human resource is therefore superior to other resources.

Human resource vs land vs physical capital

Human resource
  • Living and active
  • Can learn, improve and innovate
  • Makes land and capital useful
  • Grows with education and health
Land
  • Natural, passive
  • Fixed in quantity and location
  • Useless without human effort
  • Can degrade if misused
Physical capital
  • Man-made: tools, machines, buildings
  • Can be increased by investment
  • Needs people to operate and maintain
  • Depreciates over time
BasisHuman resourceLandPhysical capital
MeaningPeople's skills, knowledge, health and effort used in productionNatural resources: soil, water, minerals, forestsMan-made aids to production: tools, machines, buildings, infrastructure
NatureLiving and activeNatural and passiveMan-made and non-living
Can it work by itself?Yes. It organises and uses the other resourcesNo. It needs human effortNo. It needs people to operate it
Can it improve?Yes, through education, training and healthcareQuantity is fixed; quality can fall through misuseCan be increased by investment, but wears out (depreciates)
OwnershipCannot be bought or sold; people work for wagesCan be owned, sold, leased or inheritedCan be owned, sold or transferred
Role in productionPlans, operates and innovatesProvides the base and raw materialsIncreases the efficiency of work

Answer for exams

3-mark answer

Human resource is different from land and physical capital in the following ways:

  1. Human resource can make use of land and capital. Land and capital cannot become useful on their own.
  2. Human resource can be improved through investment in education, training and healthcare. Land is fixed in quantity.
  3. Human resource can create new ideas, technologies and methods that make land and capital more productive.

5-mark answer

  1. Uses other resources: land and physical capital are passive. They produce nothing until people work on them. A field needs a farmer, and a machine needs an operator.
  2. Can be developed: investment in education, training and health turns people into human capital. This is called human capital formation.
  3. Creates value and innovation: skilled people invent better methods and technology, raising the productivity of land and capital.
  4. Gives returns to the individual and society: an educated, healthy person earns more and also contributes more to national income.
  5. Superior resource: for these reasons, human resource is considered superior to other resources. Countries such as Japan, with few natural resources, developed by investing in their people.

Examples

  • Agriculture: the same land gives a higher yield when the farmer knows about better seeds, irrigation and crop rotation.
  • Manufacturing: a factory's machines produce more when workers are trained to operate and maintain them well.
  • Services: a computer is physical capital, but its value comes from the person who writes software or analyses data on it.
  • NCERT story of Sakal and Vilas: Sakal studied and trained, became a skilled worker and earned well. Vilas could not study because of poverty and ill health, and stayed in low-paid work. The difference was investment in education and health, not land or machines.

Human capital formation

Human capital formation
Investment
Education, training, health
→
Skilled, healthy people
Human capital
→
Higher productivity
Better use of land and capital
→
Higher income and growth
For the person and the country

When a country invests in its people, a large population becomes an asset rather than a liability. That is why governments spend on:

  • schools and higher education;
  • skill training;
  • public health.

In India, this includes:

  • the National Education Policy 2020;
  • skill programmes under Skill India;
  • health coverage such as Ayushman Bharat.

Related questions from "People as Resource"

What is meant by "people as resource"?

It means looking at a country's working people in terms of their productive skills and abilities. A population becomes a resource when it is educated, trained and healthy.

What is human capital formation?

Investment in education, training and medical care that makes people more productive. It increases the stock of skill and productive knowledge in a country.

Why is human capital considered superior to other resources?

Because it can use land and capital, can be improved by investment, and creates innovation, while land and capital are passive.

Is population the same as human resource?

No. A population becomes human resource only when people are healthy, educated and skilled enough to contribute to production.

Frequently asked questions

How is human resource different from other resources like land and physical capital?

Human resource can make use of land and capital, while land and capital cannot become useful on their own. Human resource can also be improved through education, training and health, so it is considered superior to other resources.

What is the difference between human capital and physical capital?

Human capital is the skill, knowledge and health of people. Physical capital is man-made equipment such as tools, machines and buildings. Physical capital needs human capital to be used productively.

Why is land called a passive resource?

Because it cannot produce anything without human effort and capital. Its quantity is also fixed.

Which chapter has this question?

NCERT Class 9 Economics, Chapter 2, "People as Resource".

For working professionals

In a company, the same idea explains why HR invests in hiring, training and retention. To see how people costs and skills translate into business numbers, read business acumen for HR. For how companies plan the people they need, see workforce planning.

Answer based on NCERT Class 9 Economics, Chapter 2 "People as Resource". Updated October 2026.

By
About the author
Vishvas YadavFounder, HR Calcy

Founder of HR Calcy and an independent HR and payroll consultant with 16+ years in Indian HR and payroll. PGDM in Human Resources from XLRI Jamshedpur, ISO 9001:2015 and ISO 27001:2022 Lead Auditor, with HR and payroll software implementations for multinational companies across several countries. Advises on payroll and statutory compliance, labour law (PF, ESI, CLRA, gratuity and bonus) and wage structuring. Based in Bengaluru, Karnataka.

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